Zero-Rating of Medical Health Insurance Cover for Foreign Employees Under VAT Act Sections 11(2)(ℓ) and 41B

• VAT ruling VR 013 issued on 30 May 2025 under the Value-Added Tax Act 89 of 1991
• Concerns zero-rating of medical health insurance cover
• Ruling applies only to the Applicant and SARS
• Confirms premiums for medical health cover for employees of foreign employers qualify for zero percent VAT
• Relevant section of the VAT Act is 11(2)(ℓ)
• Applicant is an insurer providing short-term insurance cover
• Insurance covers employees and dependents residing outside South Africa
• Covers medical emergencies including evacuation, treatment, and repatriation
• Premiums charged in foreign currency and payable annually in advance
• Subject to standard terms and conditions by SARS
• Ruling allows zero-rating if services are supplied directly to foreign employers not present in South Africa

Source: sars.gov.za

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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